9 Sep 2015

Homeowners to take class action against EQC

6:47 pm on 9 September 2015

More than 100 Christchurch homeowners are launching a class action against the Earthquake Commission (EQC), arguing the commission has failed to meet its legal obligations.

EQC

One of the thousands of houses badly damaged in the 2010 and 2011 Canterbury earthquakes. Photo: RNZ

Law firm Anthony Harper today delivered a letter to the EQC outlining the details of the group action.

If the EQC agrees to issue a joint press release confirming that its position aligns with the declarations that the group is seeking, the group says the case will not go to court.

The EQC received more than 160,000 building claims in the wake of Canterbury's earthquakes in 2010 and 2011.

Lawyer Peter Woods, who is leading the class action on behalf of 107 homeowners, said the EQC had left many outstanding claims in dispute and now-settled claims could also be in doubt.

He said many homeowners had been subject to multiple assessments by EQC and each time the scope of repair works included less damage.

"It's caused this real deep sense of suspicion that people are getting ripped off by EQC."

Compliance with guidelines 'not enough'

Mr Woods said the group would seek three sets of declarations from the High Court that covered the extent of EQC's liability.

He said the Canterbury earthquakes had been a learning curve.

"We need to have the Earthquake Commission operating properly within the statutory framework so that, when the next big event happens, people don't suffer what the people of Canterbury have had to suffer."

The declarations will also argue that EQC's liability was not covered merely by compliance with Ministry of Business, Innovation and Employment (MBIE) guidelines for Canterbury.

"[EQC's] use of MBIE guidelines on floor levels, created after the earthquakes, is an example of EQC avoiding structural repairs on many homes," he said.

A recent MBIE report into some structural repairs, which were exempt from a building consent, found more than a third of the surveyed homes did not meet the Building Code.

Most non-compliant cases involved a method known as a 'jack and pack', which involves packing material between the floor and foundations to re-level houses.

MBIE officials said the defects identified with underfloor repairs had nothing to do with the ministry's guidelines.

Mr Woods said EQC's reluctance to accept liability extended to what it was willing to repair, not just the standards of its repairs.

He said if carrying out earthquake repairs properly involved having to do work on undamaged aspects of the building - such as disturbing old wiring - then the EQC, not the homeowner, should bear the cost.

"The cost of working on those other parts is simply part of the cost of replacing or reinstating the earthquake-damaged parts," Mr Woods said.

Homeowners 'waking up to problems'

A spokesman for the group, Redcliffs homeowner Warwick Schaffer, said structural repairs to foundations had caused the most problems in Canterbury, because the EQC seemed to "cut corners" to save money.

"Homeowners have hammered away and hammered away and I think the tide has sort of turned before the end of all the repairs, and people are discovering all the problems now and waking up to it."

Anthony Harper is taking on the case at reduced rates and is capping the fee at $2000 per property.

Last month, Grant Cameron of GCA Lawyers, launched a separate class action against the Crown-owned insurer Southern Response.

Forty-seven homeowners are involved in the Southern Response class action. They believe their insurer has underestimated the true value of their earthquake claims.

Radio New Zealand has contacted EQC for comment.

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